Former Fed Official says sorry to America

A former Fed official says sorry to America and confesses that QE doesn't work and the US economy is fundamentally unsound. He tells his story in this article. 

Need to verify this.

Andrew Huszar: Confessions of a Quantitative Easer:
http://online.wsj.com/news/articles/SB10001424052702303763804579183680751473884

People hope for a recovery

There sure are a lot of good news over the years about recovery, including in recent months. Unfortunately, recovery is not built based on mere hope and gut feelings.

When confronted with inconvenient truths such as this data, many simply brush it aside, and fall back to their favourite tactic of name-calling, in the hope of discrediting the person who show this data.

Bailouts don't make economic sense

Smaller, more prudent banks should be buying up failed companies' assets and gaining market shares when a financial crisis bankrupts big banks. But as usual, people will ask for bailouts because the world is going to end. 

Fact: Prior to the 2008 crisis, there were more than 7,000 commercial banks in the US. So the world isn't going to end when the big banks fail. It just means that the services will be done by someone else. This is what happens in sound economies throughout history.

One hundred big banks could go, warns McKinsey:
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/10431438/One-hundred-big-banks-could-go-warns-McKinsey.html

Twitter

It seems like traders are so hungry for yields, that they are willing to price twitter at 20x of revenue (note: revenue, not profit). This is a company that has not made any profit! I started shorting quite a lot at $49. Will stay in for a while and see how it goes.

Update 19/11/13: Closed all shorts at $40.

Crazy debt

It took 40 presidents 193 years to put $1 trillion of debt on the nation. The current administration has managed to repeat this feat 7 times over in only 5 years.

Wrong call on taper

Singapore's top bank: We got our Fed call wrong:
http://sg.finance.yahoo.com/news/singapores-top-bank-got-fed-055000336.html

A lot of market participants got it wrong in September. They were all expecting the Fed to taper by an average of $10b. In August, I was saying that it is more likely that the Fed will continue/increase QE rather than taper. Turns out that they couldn't even do a token $1b or $5b taper!

To reiterate, the Fed's priority is the bond market! They want to keep the government afloat.

Now the market is expecting the Fed to taper later this year or early next year.

The next surprise for the market will be when the Fed does not taper or when they increase the size of QE. Even if they do taper, they will return after a few months, because the pain will be too great.

Nobel Prize in Economics

44 years of Economics Nobel Prize, and only 1 winner from Asia. Meanwhile, Asia has been booming and the other nobel-winning regions have been declining on a relative basis. What a sham!